* Fiat says expects Chrysler to work on IPO for Q1 2014

* Fiat says uncertain if and when IPO will happen

* IPO delay prolongs uncertainty over potential Fiat-VEBA deal

By Agnieszka Flak

MILAN, Nov 25 (Reuters) - The planned stock market listing of Fiat's U.S. unit Chrysler will not take place this year, the Italian carmaker said on Monday, prolonging the uncertainty over its chances of buying out the rest of the company.

The initial public offering was expected to help settle a long-running spat over the U.S. automaker's value between Fiat and a retiree healthcare trust tied to the United Auto Workers union, which owns 41.5 percent of Chrysler.

The delay represented yet another obstacle to Chief Executive Officer Sergio Marchionne's plan for the Fiat-Chrysler alliance, one of the centerpieces of the Obama administration's 2009 restructuring of the U.S. auto industry.

Chrysler's board of directors "determined that it will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013," Fiat said in a statement.

The company said it expected Chrysler to work toward an IPO in the first quarter of 2014, but added it could not say if and when such an offer would happen as it would depend on "market conditions and other relevant considerations."

In a regulatory filing late Monday, Chrysler said it intended to list its shares on the New York Stock Exchange under the symbol "CGC." The company also added five other underwriters, including Bank of America Merrill Lynch, which with JPMorgan Chase & Co, will lead the IPO.

The additional bookrunners are Barclays Plc, Goldman Sachs Group, Morgan Stanley and UBS AG .

Marchionne, who has run both Chrysler and Fiat since 2009, was looking to kick off its IPO road show in early December, but that was pushed back after a U.S. tax issue emerged, two sources said.

Fiat assumed management control and a stake in Chrysler after the U.S. automaker emerged from a government-funded bankruptcy restructuring. Fiat has since increased its stake in Chrysler to 58.5 percent.

The Chrysler IPO process is already highly unusual because Marchionne has publicly said an IPO would undermine his plans to merge the two companies. But his inability to secure a deal with the UAW trust fund made an IPO impossible to avoid.

This feud between Chrysler's two shareholders came to a head in late September when the UAW trust exercised a right enshrined in Chrysler's 2009 bankruptcy documents to force the U.S. automaker to file IPO paperwork.

Investors had hoped that the preliminary work for the IPO of part of the VEBA stake might have helped narrow the difference between the two sides, and that they could reach a deal without carrying out the share sale.